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Private clients increasingly interested in private capital exposure

  • By Neil Martin
  • News

Robert Crowter-Jones, Head of Private Capital at Saranac Partners (an advisor to UHNWIs/families on private capital opportunities and transactions), believes that private clients are becoming increasingly interested in private capital exposure.

He told IFA Magazine: “Families now tend to allocate 10-30% of their total assets into private capital investments, with debt/equity exposure via funds and direct investments growing year-on-year.

“An interesting reason for this demand is that, given the quantity of new wealth generation that now originates from entrepreneurial activity, clients tend to have a great affinity for investing in other private enterprises, and enjoy taking a more active role in the growth of their capital.”

Recent trends

“Families and individuals have historically invested in private capital through funds but have more recently begun to do so via co-investment deals with fund managers, asset-by-asset deals. Indeed, many families have become more comfortable with idiosyncratic risk, as demonstrated by the fact that many have been investing directly into businesses without a PE sponsor alongside them.

“The rise in GP-led secondary transactions has increased access to liquidity in the asset class and private equity investors are able to gain liquidity earlier in the life cycle of the fund investments. Analyzing the value to the investor can be challenging and professional advisers will play a key role in assessing secondary offers provided via the GP.”

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